Legislation would provide coverage to more than 100,000 uninsured Coloradans

Gov. Bill Ritter today announced new legislation that would provide health coverage to more than 100,000 uninsured Colorado citizens and families while also addressing cost-shifting that increases expenses on the insured and private businesses.

The Colorado Healthcare Affordability Act, which will be designated as House Bill 1293, would allow Colorado to leverage state funds to draw down additional federal funds to provide coverage to more than 100,000 uninsured Coloradans. The proposal also would help stem the rising cost of health insurance for businesses and families by addressing cost-shifting, one of the key drivers of rising costs, without increasing the burden on taxpayers.

“Roughly 800,000 Coloradans, including 180,000 children, currently lack health insurance,” Gov. Ritter said. “Over the past two years, we’ve launched a Building Blocks to Healthcare Reform strategy. The Colorado Healthcare Affordability Act gives us an opportunity to continue that progress, and to make major strides at a time when more and more families are struggling just to keep food on the table.”

By assessing a provider fee on hospitals, Colorado would generate an additional $600 million a year to provide coverage to the uninsured, and receive $600 million in federal matching funds. The combined $1.2 billion would cover more than 100,000 currently uninsured Coloradans through Medicaid and the Child Health Plan Plus. The funds also would improve hospital reimbursement rates for service provided through Medicaid and the Colorado Indigent Care Program (CICP).

“Annually, Colorado hospitals incur more than $375 million in uncompensated costs by serving Medicaid patients because they receive less than 55 percent of total costs for treating Coloradans in need,” said Colorado Hospital Association (CHA) President and CEO Steven Summer. CHA represents 90 hospitals and health systems throughout Colorado. “We are committed to expanding access to affordable healthcare services for those most at risk.”

The bill will be sponsored by the Joint Budget Committee, the bipartisan group of legislators that is responsible for setting the state budget each year.

Sen. Moe Keller (D-Wheat Ridge), chair of the committee and one of the bill sponsors, said “This proposal will expand coverage to more than 100,000 uninsured Coloradans and create an opportunity for the state to reform and modernize the way payment rates are set for hospitals, creating a more rational and transparent hospital payment structure.”

More than 40 states have implemented this type of strategy for health programs, including more than 20 states that have hospital provider fees. Colorado passed a similar law with nursing home providers in 2008 (House Bill 08-1114, which was co-sponsored by then-Rep. Al White (R-Hayden) and Sen. Jim Isgar (D-Hesperus)).

“Uninsured patients and Medicaid underpayment to hospitals are two of the primary drivers of cost-shifting in healthcare,” said JBC member and bill sponsor Rep. Don Marostica (R-Loveland). “This legislation will allow us to cover a significant portion of the uninsured and reduce the rate of rising healthcare costs all across the state.”

Rep. Jim Riesberg (D-Greeley), one of the lead sponsors, is Chairman of the House Health and Human Services Committee. He said, “With the help of hospitals statewide, Colorado can draw down federal funds at a dollar-for-dollar match to provide coverage to more than 100,000 Coloradans. This is the most vital healthcare expansion we’ve made in years. Especially in this time of economic crisis, to be able to expand coverage for the most vulnerable among us is a crucial and ingenious step to keeping healthcare affordable for everyone.”

The Colorado Hospital Association, the Department of Health Care Policy and Financing and the Governor’s Office have been working together for more than nine months to develop the proposal.

If approved by the legislature, the plan will be submitted to the federal Centers for Medicare and Medicaid Services (CMS) for final approval.

SUPPORT FOR THE COLORADO HEALTHCARE AFFORDABILITY ACT

American Academy of PediatricsAnthemBusiness Health ForumChronic Care CollaborativeCIGNAColorado Academy of Family PhysiciansColorado Association of Commerce and IndustryColorado Association of Health PlansColorado Center on Law and PolicyColorado Children’s Health Advocates

The Challenge: Nearly 800,000 Coloradans, including 180,000 children, lack healthcare coverage. With the economy in a recession and unemployment rising, the number of uninsured citizens only threatens to increase. This will place a greater demand on taxpayers, private employers, hospitals, emergency rooms and all public health providers, at a time when revenues and resources are declining.

The Opportunity: With the help of hospitals statewide, Colorado can leverage state funds to draw down federal funds at a dollar-for-dollar match to provide coverage to more than 100,000 Coloradans. More than 40 states utilize this financing strategy, including 20 states that assess a provider fee on hospitals. Colorado enacted this strategy with nursing homes in 2008 through House Bill 1114.

The Proposal: Use revenue from a new hospital provider fee, plus the increased federal matching funds, to:

oCover more than 100,000 uninsured Coloradans through Medicaid and CHP+

oIncrease hospital reimbursement rates under Medicaid and the Colorado Indigent Care Program (CICP)

oPay the administrative costs of implementing the program

Increasing coverage and reimbursement will reduce uncompensated care and address one of the key drivers of cost-shifting to the private sector and the insured. It will help stem rising costs for everyone, and do it in a way that doesn’t increase costs to taxpayers or consumers. This proposal will also create an opportunity for the state to reform and modernize the way payment rates are set for hospitals, creating a more rational and transparent hospital payment structure.

The Numbers: The fee assessed on Colorado hospitals will generate approximately $600 million a year for the state. That new revenue will be used to drawn down an equal amount in federal funds, for total new revenue of approximately $1.2 billion annually.

The Benefits: This is a tremendous opportunity to provide coverage for the uninsured, address cost- shifting and make substantive progress towards healthcare reform.

People of Colorado – More than 100,000 additional Coloradans will be eligible for coverage through Medicaid and CHP+. Privately insured and self-pay Coloradans, as well as private employers, benefit from reductions in uncompensated care that contributes to cost shifting.

Colorado Hospitals – Benefit from increased Medicaid and CICP rates, which allows them to continue providing care to Medicaid and CHP+ clients. In the last year, Colorado hospitals treated nearly 80,000 individuals covered by Medicaid and CICP.

All Healthcare Providers – Benefit from the 100,000 additional Coloradans who will now be able to access the healthcare system with Medicaid coverage.

The State of Colorado – Benefits from the approximately $600 million of new federal revenue gained without spending any general funds.

QUESTIONS AND ANSWERS ABOUT THE COLORADO HEALTHCARE AFFORDABILITY ACT

How will the money be used?

This new revenue can be used for only three purposes: (1) providing coverage to the uninsured by expanding eligibility for Medicaid and CHP+; (2) increasing hospital reimbursement rates under Medicaid and CICP; and (3) covering administrative costs of HCPF for implementing the program.

Proposed public insurance program expansions

·Medicaid expansions for parents and childless adults up to 100% FPL

·CHP+ expansions for kids and pregnant women up to 250% FPL

·Buy-in program for disabled adults and kids up to 400% FPL

·Continuous eligibility for Medicaid children

Proposed hospital payment increases

·Reimbursement for Medicaid inpatient and outpatient care will be increased to the upper payment limit (UPL), which is the maximum allowable reimbursement under Medicaid. This rate is still below what it costs a hospital to treat a Medicaid patient.

·CICP reimbursement will be increased up to 100% of cost.

Won’t the hospitals just shift the fee onto insurers and consumers?

No. Today, care for uninsured patients and Medicaid underpayment to hospitals are two of the primary drivers of cost-shifting in healthcare. This proposal will increase hospital reimbursement rates, cover a significant portion of the uninsured and thereby reduce the cost shift.

Provisions are included in the legislation to ensure that the provider fee is not shifted onto patients or insurers. Line item billing of the hospital provider fee will be prohibited. There are also transparency requirement that include an annual accounting of provider fees paid by each hospital and projected revenue to each hospital in the form of new Medicaid and CICP payments.

If we do nothing, the cost-shift will continue to grow. This is our best hope to increase coverage for the uninsured, address Medicaid underpayment and cost-shifting.

Why is a hospital rate increase needed under Medicaid and CICP?

Annually, Colorado hospitals incur more than $375 million in uncompensated costs by serving Medicaid patients because hospitals receive less than 55% of total costs for treating Medicaid patients. By increasing hospital reimbursement rates and covering the uninsured, we will reduce the rate of rising healthcare costs.

11:45 a.m. Gov. Ritter will deliver remarks to newspaper publishers and editors from around the state during a luncheon that is part of the Colorado Press Association’s 131st annual convention. Location: Governor’s Residence, Carriage House, 8th and Logan streets, Denver.

1 p.m. Gov. Ritter, Lt. Gov. O’Brien, the Colorado Hospital Association, legislators and healthcare and business leaders will announce the introduction of the Colorado Healthcare Affordability Act, which will provide health coverage to more than 100,000 uninsured Coloradans. Location: DenverHealthMedicalCenter, Pavilion for Women and Children, first floor rotunda, 790 Delaware St

Lt. Gov. Barbara O’Brien today toured the recently opened non-profit eSpaceCenter for Space Entrepreneurship in Louisville. The center, designed to help small aerospace entrepreneurs develop products and share information, is a partnership between the University of Colorado and SpaceDev, an incubator for aerospace companies and workforce development.

The center opened with funding from the Department of Labor, Office of Economic Development and International Trade, the University of Colorado at Boulder and Air Force Research Lab in Albuquerque, NM.

“The eSpaceCenter model is an innovative approach to keeping our aerospace industry growing and healthy,” said Lt. Gov. O’Brien. “It not only gives small companies an opportunity to test and develop their products, but it allows aerospace students to get real world experience while they are learning,” she added.

Colorado has the second largest aerospace industry in the country and Gov. Ritter has identified it as one of the four key sectors for Colorado. Seven prime aerospace contractors and 300 smaller aerospace companies are located in the state. More than 26,000 private-sector aerospace employees and more than 171,000 jobs are associated with aerospace.

Lt. Gov. O’Brien serves as a co-chair of the Colorado Space Coalition, a collaboration of research centers, aerospace companies, military leaders, academic organizations, economic development groups and government to promote Colorado‘s aerospace industry.

Gov.Bill Ritterwill join governors from around the country this weekend at the National Governors Association annual winter meeting inWashington,D.C.Jobs, the economy and the American Recovery and Reinvestment Act, which President Obama signed into law inColoradoearlier this week, will be among the topics discussed.

Governors will be meeting with the President, members of his Cabinet, congressional members, academic leaders, business executives and other experts.

Gov. Ritter also will be participating in sessions on issues important to Colorado, including strengthening the nation’s infrastructure, reducing home foreclosures, building out a modern energy infrastructure, addressing climate change, reforming health care, and retraining the American workforce for a 21stcentury, global economy.

For more information about the annual meeting, visitwww.nga.orgor contact the NGA media office at 202-624-5301. Some of the highlights:

7:30 a.m. MST Governors will meet at the White House with President Obama, Treasury Secretary Geithner and HUD Secretary Donovan to discuss the national economic outlook and the American Recovery and Reinvestment Act.Media availability: 9:30 a.m. MST.

Gov.Bill Ritterannounced the creation today of an accountability and oversight board to ensure that fundsColoradoreceives from the American Recovery and Reinvestment Act, signed inDenveryesterday, are spent effectively and transparently.

“The recovery act presents an extraordinary opportunity to strengthenColorado‘s economy and create new jobs all across the state,” Gov. Ritter. “With this opportunity also comes a need for additional monitoring to ensure the funds are invested effectively, efficiently and wisely, and with an unprecedented level of oversight, transparency and accountability.

“I have asked this distinguished group of Coloradans to join the accountability board to support the work of my administration in the expenditure of these funds,” Gov. Ritter said. “Wehave a sacred responsibility to taxpayers that this will be an open process. This board willestablish various methods for the public to monitor where their money is going and how it is being spent.”

The board will be chaired by Don Elliman, director of the Colorado Office of Economic Development, and composed of public- and private-sector leaders from across the state, including:

Tony Hernandez, director, Division of Local Government, Colo. Dept. of Local Affairs

Andre Pettigrew, director, Denver Office of Economic Development

Richard Truly, former director of NREL and former administrator of NASA

Gov. Ritter’s budget and policy directors and several Cabinet members will support the board.

The board has already created a website (www.colorado.gov/recovery), modeled after the nationalwww.recovery.gov, and an e-mail address (recovery@state.co.us). The board also will establish other methods for the public to monitor and hold state actions accountable, including the regular publication of reports and frequent website updates with detailed and timely information about bid processes and the progression of recovery funds.

The board intends to quickly identify and address the numerous pending questions about requirements, obligations and procedures that surround the distribution of recovery act funds. Answers to many of these questions will not be known until the appropriate federal agencies establish their own rules.

Working with state agencies, contractors and citizens, the board will create rules and procedures where none exist. Members of the board will also hold meetings around the state to gather direct input from local residents and communities.

Several other states are establishing offices, task forces and coordinators to oversee the distribution of recovery funds.Colorado‘s effort will seek to draw on the best practices from those other states.

“This recovery act represents an important step forward for our economy,” Gov. Ritter said. “We must keep faith with taxpayers through effective spending of these funds and by closely overseeing those expenditures. Transparency and accountability will help us accomplish those goals.”

10 a.m. Gov. Ritter will take part in two events related to high-school dropout prevention. At the first event, AT&T will present two grants to help reduce dropout rates atDenverhigh schools. At the second event, Gov. Ritter will deliver remarks during a Dropout Prevention Summit organized by his Office of Policy and Initiatives.

Location:LincolnHigh School,2285 S. Federal Blvd.,Denver

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12:15 p.m. Gov. Ritter and First Lady Jeannie Ritter will visit with wounded military veterans during National Salute to Hospitalized Veterans Week. The visit is closed press but the Governor and First Lady will hold a media availability immediately afterward, from 12:15 to 12:30 p.m.Location:VeteransAdministrationMedicalCenter,1055 Clermont St.,Denver